Consumer prices in Spain’s depressed economy have been slipping since June — and dropped more than 1 percent last month due to plummeting oil prices. That doesn’t mean Spaniards like Ivan Piqué, a 28-year-old unemployed IT specialist in Barcelona, are spotting a huge change, yet. “I haven’t noticed any prices coming down besides gasoline, so I’m still trying to spend as little as possible,” he says.

But, soon, he plans to move to Canada to seek work. Maybe there he’ll see some reprieve at the checkout lines, as the Bank of Canada recently — and quite unexpectedly — cut its main interest rate for the first time since 2009 following fears that the falling price of oil would drag down the Great White North’s inflation rate. Similar concerns are stoking governments to act in Europe and Asia, and some consumers in the U.S. say they’re already noticing a bit more cash in their pockets.

We’re not going to solve an indebtedness problem by taking on more debt.

– Lacy Hunt, executive VP at Hoisington Investment Management

Welcome to a world in deflation (and we’re not just talking about Tom Brady’s footballs). Falling prices are great if you have cash, but they reflect a depressed world where consumers and businesses aren’t spending money and aren’t buying the oil, copper, iron ore or coal that took billions of dollars to develop just a few years ago. Typically, they also take away one of the key policy tools to revive a stumbling economy: cutting interest rates. That’s because lending rates need to go below the inflation rate to stimulate the economy. But with inflation near or below zero, that’s mathematically impossible. “Deflation isn’t looming,” says A. Gary Shilling, a Springfield, New Jersey-based consultant and investment adviser. “It’s here.”

A lot of the concerns about today stem back to actions taken following the 2008 global financial crisis. That’s when — in the U.S., at least — the Federal Reserve responded by eventually buying trillions of dollars of government bonds, pushing money into the banking system. The program is widely, though not universally, credited with helping to stabilize the inflation rate, push up the stock market, and support the economy enough to bring down unemployment and plant the seeds of recovery.

Unfortunately, the rest of world’s struggling to rev up their own economic engines. Roger Bootle, managing director of Capital Economics in London, says that Europe has stumbled by trying to fight the last war — against inflation — rather than recognizing the imminent dangers of deflation, and he expects that eurozone will have trouble economically hanging together. Other countries have also taken risky and, some say, dangerous measures to clean up problems left over from the 2008 global financial crisis. That’s meant ballooning levels of debt in China, Japan and Europe, even though debt was blamed for the original crisis. “We’re not going to solve an indebtedness problem by taking on more debt,” warns Lacy Hunt, economist and executive vice president at Hoisington Investment Management, which runs its own bond fund.

Not everyone is worried, of course. In fact, in the U.S., the best deals spun off by the global panic over dropping prices, perhaps, are fantastically cheap mortgages. Zach Nalbone, for one, decided to refinance his Washington, D.C., home just a year after buying the fixer-upper and says he shaved a full point off a 30-year loan — which cut $538 from his monthly payment. “It allowed me to save a tremendous amount of money,” says the 24-year-old cybersecurity consultant.

To be sure, governments are trying to prevent prices from plummeting. In January, the European Central Bank upped the ante by announcing a trillion-dollar stimulus program, though the hard part will be getting money from the banks to consumers or companies ready to spend it. Shilling calls it a “desperation play,” whose immediate effect is to weaken Europe’s currency, the euro. When foreigners flee the euro and buy dollars, they’ll often park their money in the U.S. bond market, which brings down interest rates that determine what borrowers pay on a mortgage — thus the link between deflation in Europe and the U.S. housing market.

But the last time the world saw global competitive currency devaluations like this, Hunt warns, was in the run-up to the Great Depression in the late 1920s. And if history has taught us anything, it’s that it’s often repeated. Indeed, one McKinsey Global Institute study that looked at past instances of financial crises found the most common way of bringing down debt levels following a financial crisis was through an extended period of austerity, and where economic growth is held back as debt is paid down. Translation? It’s a tough road ahead for many of us, warns Hunt.